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Small-Cap Basic Materials Stocks Off to a Strong Start in 2014

The two most striking price-movements in basic materials heading into the new year were the enormous success of oil and gas stocks, as well as the concurrent and precipitous decline of gold stocks.

Over the few days of trading that have taken place so far in 2014, however, independent energy producers have maintained this momentum, while gold stocks seem to be staging what could turn out to be a comeback, likely depending on how the Federal Reserve handles both the transition to a new chairwoman in Janet Yellen, as well as how successful it is in chaperoning the US economy into an era of gradually decreasing Treasury spending.

Indeed, since the waning days of trading in December, gold futures slated for Feb 14 delivery have jumped some 2.60 percent on New York’s COMEX to $1,240.90 per ounce. A look at the best-performing stocks in the basic materials sector since the turn of the new year would seem to confirm this.

Indeed, of 2014’s five best performing materials equities with a market-share of $300 million or greater, the top two are gold stocks.

Sporting nearly 100 different properties throughout the state of Nevada, Allied’s business is based on unrefined gold and silver. The gains so far this year have been impressive, but will have a long way to go to offset a price cut of over 80 percent throughout 2013.

Seabridge makes its business off of North American gold, copper, silver, and molybdenum plays, particularly in Canada. Despite jumping to a 10 percent gain to start off the new year, the company is working against the backdrop of a 2013 during which it saw its shares lose over half of their price.

With presence in some of the best shale plays available throughout the US and Canada, Quicksilver embarks on 2014 carrying the momentum it had built throughout the latter half of the previous year. Indeed, the company is one of the most successful of Equities.com’s turnaround stock portfolio, and is up over 9 percent so far after more than doubling its price in the latter half of 2013.

Thompson Creek Metals Company Inc. ($TC)

Industry: Industrial Metals & Minerals

Market Cap: $404.74 million

Price: $2.30

2014 Performance: +8.26 percent

Thompson Creek’s business is primarily tied to the mining of molybdenum for alloys, and to a lesser extent gold and copper. The company’s strong start to the new year comes on the heels of a 2013 that saw its stock lose about half of its price.

Rentech manufactures and sells nitrogen-based fertilizer products in the US, and also begins its 2014 on much stronger footing than it had ended the previous year, during which the stock took a 50 percent price-cut.

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